Business Studies · Oct / Nov 2021 · Paper 12 · Question 1

0450

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SWB is in the secondary sector. It produces 150000 wooden bookcases each week using batch production. SWB sells all its output to one customer. Quality control is important. SWB has 240 1 employees, of which 100 are part-time workers. SWB’s managers use noticeboards around the factory and meetings with employees every month to help reduce communication barriers. The Operations Manager is considering introducing just-in-time inventory control to reduce the amount of waste.

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1(a)[2]
Define ‘secondary sector’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Firms that process and manufacture goods from natural resources [2]
OR Manufacture goods using the raw materials provided by the primary sector [2]
OR Uses manufacturing to transform the raw materials generated in the primary sector into a product [2]
Partial definition e.g. makes products [1]
2 Do not award examples.
1(b)[2]
Identify two factors a business should consider when deciding whether to introduce just-in-time inventory control. Award 1 mark for each factor identified. Points might include:
Reliability of suppliers / time / speed of delivery / availability of inventory at suppliers / distance from suppliers
Whether there is steady production / predictable demand
Efficient system of ordering materials / good communication systems
Whether discounts are available for bulk purchases
Cost/availability of storage space Other appropriate responses should also be credited. 2 Only award the first two responses given. Notes
1(c)[4]
Outline one advantage and one disadvantage to SWB of using quality control. Award 1 mark for each relevant advantage/disadvantage. Award 1 mark for each relevant reference to this business. Points might include: Advantages:
Tries to eliminate faults before customer receives products / reduces likelihood that customers get faulty products [k] as only has one customer [app]
Not all workers need to be trained (as inspectors employed to check quality) [k] which is important as has 240 employees [app] Disadvantages:
Cost/need to recruit inspectors/employees to check [k] the bookcases [app]
Does not find out how/where fault occurred [k] in each batch [app]
High cost if products must be scrapped / reworked / service repeated [k] which clashes with its objective to reduce waste [app] Other appropriate responses should also be credited. 4 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words may be appropriate for this question:
150 000 / bookcases or related words such as wood
Batch production
240 employees / 100 or part-time employees / 140 full time
Factory
One customer
Just-in-time inventory control
Objective is to reduce waste Other appropriate examples in context can still be credited. Notes
1(d)[6]
Explain two possible communication barriers that might exist at SWB. Award 1 mark for identification of each relevant communication barrier (max 2). Award 1 mark for each relevant reference made to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include:
Technical language / jargon / different language spoken [k] so workers do not understand [an] so make wrong number of bookcases [app]
Lack of feedback / no opportunity for feedback [k] so do not know / cannot check if message received / understood (correctly) [an] so not able to help reduce waste [app]
Noise [k] so employees may not hear / mishear orders [an] in the factory [app]
Employees may not be at work [k] as 100 work part-time [app] so not able to obtain the information [an]
Too much information / detail [k] so not possible to absorb / take it all in [an]
Employees may not see/read message [k] on the noticeboard [app]
Not listening / not paying attention [k] in the meeting [app]
Wrong communication method/medium used [k]
Receiver may not trust the sender [k] Other appropriate responses should also be credited. 6 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words may be appropriate for this question:
150 000 / bookcases or related words such as wood
Batch production
240 employees / 100 or part-time employees / 140 full-time
Factory
Reducing waste
Meetings (every month)
Noticeboards
Just-in-time inventory control Other appropriate examples in context can still be credited. Notes
1(e)[6]
Do you think it is a good idea for a business to have only one customer? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award 2 marks for a justified decision as to whether it is a good idea for a business to have only one customer. Points might include:
Only one source of revenue / sales [k] so if the customer does not buy, the business could fail / experience cash flow issues [an]
Can focus / specialise on the needs of that customer [k] increasing customer loyalty [an]
Can help planning / know what need to order [k] reduces amount of wastage [an]
No need to advertise [k] leading to lower marketing costs [an]
Can give customer too much power to influence prices [k]
Less administration (compared to several customers) [k] Other appropriate responses should also be credited. Justification might include: Having a single customer can make it easier to focus on the needs of that customer [k] so more likely to build customer loyalty [an.] However, can spread the risk if more than one customer [k] so if one stops buying they can rely on the other customers [an]. I think having a single customer is too high a risk as the business is totally dependent on one other business for its own success [eval] as it ties its success to the other business over which it has little control. [eval] 6 This is a general question so there are no marks for application. Notes

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